Lauzon et al v. Pulte Homes, Inc. et al
ORDER DENYING 18 Motion for Leave to File Amended Complaint. Signed by Judge Xavier Rodriguez. (tr1)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
JONATHAN LAUZON, et al.,
PULTE HOMES, INC., PULTE HOMES OF §
TEXAS, L.P., and CENTEX HOMES, INC., §
Civil Action No. SA-12-CV-177-XR
On this day the Court considered Plaintiffs‟ motion for leave to file their first amended
complaint (Doc. No. 18). After careful consideration, the Court DENIES the motion.
Plaintiffs in this case are owners of homes in the Hills of Rivermist residential
subdivision in Bexar County, Texas. On January 24, 2010, a retaining wall in the subdivision
collapsed and a landslide ensued. Plaintiffs allege that the failure of the retaining wall put their
homes in danger of physical damage and diminished the value of their properties.
Plaintiffs filed suit against Defendants Pulte Homes, Inc., Pulte Homes of Texas, L.P.
(“Pulte”), and Centex Homes, Inc. (“Centex”), in the 57th Judicial District Court of Bexar
County, Texas on January 23, 2012, alleging negligence, negligence per se, gross negligence,
private and public nuisance, fraud in a real estate transaction, fraud, violations of the Texas
Deceptive Trade Practices Act, breach of contract, and breach of implied warranty. (See Def.‟s
Notice Removal 1, Doc. No. 1; Pls.‟ Orig. Pet., Doc. No. 1, Ex. A). Defendants Pulte and
Centex are the developers of the subdivision and are wholly owned subsidiaries of Pulte
Group, Inc. (formerly known as Pulte Homes, Inc.).1 Centex removed the action to this Court
on February 24, 2012, based on diversity jurisdiction.
On January 19, 2012, Centex filed a separate lawsuit, also in the U.S. District Court for
the Western District of Texas, against Arias & Associates, Inc. (“Arias”), and Gravity Walls,
Ltd. (“Gravity Walls”), the two companies that Centex hired to design and construct the
retaining wall that collapsed.2 Centex‟s case against Arias and Gravity Walls was assigned to
Judge Garcia and is styled SA-12-CV-53-OLG.
Plaintiffs allege that they had no knowledge, nor should they have known through the
exercise of reasonable diligence, that Arias and Gravity Walls were allegedly negligent in the
design and construction of the wall until after Centex filed its lawsuit on January 19. (Pls.‟
Prop. Am. Compl. ¶ 8, Doc. No. 18, Attach. 1). Upon learning that Arias and Gravity Walls
were allegedly negligent in the design and construction of the wall, Plaintiffs attempted to
assert claims against them in several ways.
First, on March 26, 2012, Plaintiffs moved to intervene in Judge Garcia‟s case.3 That
same day, Plaintiffs also moved to consolidate this case with Judge Garcia‟s case, filing
motions to consolidate in both actions.4 Judge Garcia denied Plaintiffs‟ motions to intervene
On June 18, 2012, the Court dismissed Plaintiffs‟ claims against Pulte Group, Inc., for lack of personal
Centex retained Arias to be the geotechnical engineer for the construction of the Rivermist Subdivision. See
Centex v. Arias & Assocs., Inc., No. SA-12-CV-53-OLG, Compl. ¶ 8, Doc. No. 1. Centex subsequently
contracted with Gravity Walls to construct the wall that Arias designed. Id. ¶ 10.
See Centex, No. SA-12-CV-53-OLG, Doc. No. 11.
See Doc. No. 12 in Centex; Doc. No. 7 in this case.
and consolidate on May 31, 2012.5 As a result of Judge Garcia‟s ruling, this Court denied
Plaintiffs‟ motion to consolidate as moot on June 7.
On July 11, 2012, Plaintiffs filed this motion for leave to amend their complaint to add
Arias and Gravity Walls as defendants in the lawsuit. (Doc. No. 18). Plaintiffs allege that the
amendment is necessary because, since Plaintiffs‟ motions to consolidate and intervene have
been denied, it has become apparent that joinder is required so that all potentially responsible
parties can be joined in one lawsuit. (Pls.‟ Mot. Leave ¶¶ 5-6, Doc. No. 18). Because both
Arias and Gravity Walls are citizens of Texas, as are Plaintiffs, their joinder to the lawsuit
would destroy diversity. (Pls.‟ Prop. Am. Comp. ¶¶ 1, 4-5, Doc. No. 18, Attach. 1).
Centex filed a response in opposition to Plaintiffs‟ motion for leave to amend. Centex
argues that Plaintiffs‟ proposed amendment is futile and that, because the addition of Arias and
Gravity Walls would defeat jurisdiction, permitting the amendment would be improper under
an analysis of the factors enumerated in Hensgens v. Deere & Co., 833 F.2d 1179 (5th Cir.
1987). (Doc. No. 20). Although Centex has now been dismissed from the case, 6 the Court will
still consider Centex‟s arguments to the extent that the arguments are relevant to Plaintiffs‟
claims against Pulte.
Judge Garcia adopted the report and recommendations of Magistrate Judge Mathy. Judge Mathy reasoned that
the motion to consolidate should be denied because, if consolidated, the risk of prejudice and confusion would be
unacceptably high since the two cases raised “predominantly distinct and discrete issues.” Centex, Report and
Recommendation 39, Doc. No. 32). Judge Mathy reasoned that the motion to intervene should be denied because
allowing the intervention would destroy diversity jurisdiction, and thus was barred by 28 U.S.C. § 1367(b). Id. at
On September 24, the Court granted Centex‟s motion to compel arbitration and accordingly dismissed
Plaintiffs‟ claims against Centex without prejudice. (Doc. No. 21).
Plaintiffs in this case seek leave to amend their complaint by joining two non-diverse
defendants, Arias and Gravity Walls. Thus, if the Court allows the amendment, jurisdiction
will be defeated.
“If after removal the plaintiff seeks to join additional defendants whose joinder would
destroy subject-matter jurisdiction, the court may deny joinder, or permit joinder and remand
the action to the State court.” 28 U.S.C. § 1447(e). When confronted with a motion for leave
to file an amended pleading, Federal Rule of Civil Procedure 15(a) provides that a court
“should freely give leave when justice so requires.” The Fifth Circuit has held that, when a
proposed amendment will defeat a court‟s jurisdiction, justice requires that the court closely
scrutinize the amendment by considering several factors. Those factors are enumerated in
Hensgens, 833 F.2d 1179.
A. The Hensgens Factors
When faced with an amended pleading naming a new nondiverse defendant in a case
that has been removed based solely on diversity jurisdiction, the district court should
scrutinize the amendment more closely than an ordinary amendment. Hensgens, 833 F.2d at
1182. The district court must consider a number of factors in order to “balance the defendant‟s
interests in maintaining the federal forum with the competing interests of not having parallel
lawsuits.” Id. Specifically, the court should consider “the extent to which the purpose of the
amendment is to defeat federal jurisdiction, whether plaintiff has been dilatory in asking for
amendment, whether plaintiff will be significantly injured if amendment is not allowed, and
any other factors bearing on the equities.” Id. After considering these factors, along with
considering input from the defendant, the district court should then balance the equities and
decide whether the amendment should be permitted. Id. “[T]he balancing of these competing
interests is not served by a rigid distinction of whether the proposed added party is an
indispensable or permissive party.” Id. This Court will consider each factor enumerated in
Hensgens in turn.
1. Extent to which the Purpose of the Amendment is to Defeat Federal Jurisdiction
When considering the first factor, courts take into account “whether the plaintiffs knew
or should have known the identity of the non-diverse defendant when the state court complaint
was filed.” Gallegos v. Safeco Ins. Co. of Ind., Civ. A. No. H-09-2777, 2009 WL 4730570, at
*3 (S.D. Tex. Dec. 7, 2009) (quoting Tomlinson v. Allstate Indem. Co., No. Civ. A. 06-0617,
2006 WL 1331541, at *3) (E.D. La. May 12, 2006)). “[A] plaintiff's failure to join a nondiverse defendant to an action prior to removal when such plaintiff knew of a non-diverse
defendant's identity and activities suggests that the purpose of the amendment is to destroy
diversity jurisdiction.” Lowe v. Singh, Civ. A. No. H-10-1811, 2010 WL 3359525, at *2 (S.D.
Tex. Aug. 23, 2010) (quoting Schindler v. Charles Schwab & Co. Inc., No. Civ. A. 05-0082,
2005 WL 1155862, at *3 (E.D. La. May 12, 2005)). “However, courts have also recognized
that when a plaintiff states a valid claim against a defendant, it is unlikely that the primary
purpose of bringing those defendants into a litigation is to destroy diversity jurisdiction.” Id.
(emphasis in original) (quoting Schindler, 2005 WL 1155862, at *3).
Here, the procedural history of the case suggests that Plaintiffs are not motivated solely
by an attempt to destroy diversity. Before filing their proposed amended complaint, Plaintiffs
actively tried to pursue their claims against Arias and Gravity Walls by filing a motion to
intervene in Centex‟s lawsuit against them and also by filing motions to consolidate Centex‟s
lawsuit with this case. Plaintiffs‟ conduct shows that they have consistently been attempting in
good faith to bring claims against Arias and Gravity Walls. Had Plaintiffs simply wanted to
defeat federal jurisdiction, they likely would have attempted to join Arias and Gravity Walls in
this case months ago.
Furthermore, Plaintiffs allege that they had no knowledge, nor should they have known
through the exercise of reasonable diligence, that Arias and Gravity Walls were allegedly
negligent in the design and construction of the wall until after Centex filed its lawsuit on
January 19. (Pls.‟ Prop. Am. Compl. ¶ 8, Doc. No. 18, Attach. 1). Defendants do not dispute
this contention, nor does the Court have any reason to find otherwise. Thus, because Plaintiffs
filed their petition in state court just four days after Centex filed its lawsuit against Arias and
Gravity Walls in federal court, it is unlikely that Plaintiffs had become aware that Arias and
Gravity Walls were involved in the design and construction of the retaining wall before
Plaintiffs filed their state court petition.
Accordingly, the first Hensgens factor weighs in favor of allowing Plaintiffs‟ amended
2. Whether Plaintiffs have Been Dilatory in Seeking Amendment
“In analyzing whether a plaintiff has been dilatory in seeking an amendment, district
courts often look to the amount of time that has passed between the filing of the original
complaint and the amendment and the amount of time between the removal and the
amendment.” Schindler, 2005 WL 1155862, at *4 (citation omitted). “Courts also look to the
stage of the proceedings.” Lowe, 2010 WL 3359525, at *2 (citation omitted). Factors tending
to show that a plaintiff has not been dilatory include instances where the plaintiff seeks
amendment before a scheduling order has been issued, before trial or pretrial dates have been
scheduled, or before discovery between the parties has commenced. Martinez v. Holzknecht,
701 F. Supp. 2d 886, 891 (S.D. Tex. 2010) (citations omitted). However, a plaintiff may
nonetheless be found not to have been diligent if the plaintiff could have easily named the
nondiverse defendant in the state court lawsuit. Id. (citing O’Connor v. Automobile Ins. Co. of
Hartford, 846 F. Supp. 39, 41 (E.D. Tex. 1994)). Generally, district courts in the Fifth Circuit
have found plaintiffs to be dilatory when the proposed amendment is not filed within two
months after the filing of the original complaint or within thirty days after the notice of
removal. See Multi-Shot, LLC v. B & T Rentals, Inc., Civ. A. No. H-09-3283, 2010 WL
376373, at *9 (S.D. Tex. Jan. 26, 2010) (citing Irigoyen v. State Farm Lloyds, No. CA-C-03324-H, 2004 WL 398553, at *4 (S.D. Tex. Jan. 5, 2004)). Some courts, however, have been
more lenient, finding that plaintiffs have not been dilatory when filing a proposed amendment
up to five months after filing the state court complaint, so long as the proposed amendment is
not filed outside of applicable deadlines. See, e.g., McNeel v. Kemper Cas. Ins. Co., No. Civ.
A. 3:04-CV-0734, 2004 WL 1635757, at *3 (N.D. Tex. July 21, 2004) (finding that the
plaintiff was not dilatory when she filed her proposed amendment less than five months after
the state court complaint, six weeks after removal, and within the deadline for joining parties
in the case); Vincent v. E. Haven Ltd. P’ship, No. Civ. A. 02-294, 2002 WL 31654955, at *3
(E.D. La. Nov. 20, 2002) (finding that the plaintiff was not dilatory when the proposed
amendment was filed five months after the case was filed and before a scheduling order or
deadline for filing amendments had been established).
Plaintiffs filed this motion for leave to amend the complaint on July 11, 2012, nearly
six months after they originally filed their suit against Defendants in state court, and nearly
five months after the case was removed.7 While other factors must be considered in this case
besides merely the time that elapsed between removal and the motion for leave to amend, such
as the fact that Plaintiffs pursued their claims against Arias and Gravity Walls by filing
motions to intervene and consolidate, the Court still finds that Plaintiffs could have been much
more diligent in pursuing their amended complaint. For example, Plaintiffs could have filed
their proposed amended complaint alongside their motions to consolidate and intervene.
Alternatively, Plaintiffs could have been prepared to immediately file their proposed amended
complaint upon learning that their motions to consolidate and intervene had been denied.
Instead, after learning that their motions to intervene and consolidate had been unsuccessful,
Plaintiffs waited over a month to file their proposed amendment, at which point a scheduling
order had already been in place in this case for nearly a month. 8 Since district courts have
found delays of thirty days to be dilatory in newly removed cases, a delay of over thirty days is
especially telling here since litigation has already progressed for over eight months.
Accordingly, the Court finds that Plaintiffs have not been diligent in filing their proposed
amendment. Thus, the second Hensgens factor weighs in favor of denying the proposed
Plaintiffs‟ filed their petition in state court on January 23, 2012, and the case was removed on February 24,
A scheduling order was issued in this case on June 13, 2012. (Doc. No. 14). While Plaintiffs filed this motion
for leave to amend within the scheduling order‟s deadline for filing motions for leave to amend pleadings, such
timeliness is not sufficient to constitute diligent behavior in this context.
3. Whether Plaintiffs will be Significantly Injured if Amendment is Not Allowed
District courts have recognized that forcing a plaintiff to maintain parallel lawsuits
arising out of the same facts in two different courts wastes judicial resources, may lead to
inconsistent results, and may impose a prejudicial financial burden on a plaintiff. Schindler,
2005 WL 1155862, at *4 (citations omitted). However, the fact that a plaintiff would have to
incur the additional expense of parallel proceedings, by itself, does not constitute significant
prejudice. Martinez, 701 F. Supp. 2d at 892. In evaluating whether a plaintiff will be
significantly injured if an amendment is not allowed, the Fifth Circuit has held that a district
court may consider whether the proposed amendment would be futile. Wilson v. BruksKlockner, Inc., 602 F.3d 363, 368 (5th Cir. 2010). “As a plaintiff will not be „significantly
injured‟ by the denial of a clearly meritless claim, it is within the district court's discretion to
deny the amendment as futile if there is no reasonable basis to predict that the plaintiff will be
able to recover against the non-diverse, non-indispensable party sought to be added as a
Here, if the Court denies Plaintiffs‟ motion for leave to amend, Plaintiffs will be forced
to litigate in not just two different forums, but three. The Court has already granted Centex‟s
motion to compel arbitration. Thus, if Plaintiffs cannot join Arias and Gravity Walls to this
lawsuit, Plaintiffs will have to pursue their claims against them in yet another forum and incur
additional litigation expenses. However, the additional expense of maintaining a separate
lawsuit cannot be the Court‟s only consideration when determining whether Plaintiffs will be
significantly injured if amendment is not allowed. The Court must also take into account
whether Plaintiffs‟ claims have merit.
Centex contends that Plaintiffs‟ proposed amendment is futile. Specifically, Centex
contends that most of Plaintiffs‟ causes of action are time-barred by a two-year limitations
period, which Centex contends began to run when the wall collapsed on January 24, 2010, and
expired on January 24, 2012, before Plaintiffs filed their amended complaint. While Centex
concedes that Plaintiffs‟ claims for fraud are subject to a four-year limitations period, Centex
nonetheless argues that Plaintiffs have not pled facts sufficient to support claims for fraud
against Arias and Gravity Walls. (Resp. 3, Doc. No. 20). To determine whether Plaintiffs‟
claims against Arias and Gravity Walls can plausibly succeed, the Court will consider each of
Plaintiffs‟ alleged causes of action against them.9
a. Plaintiffs’ Claims for Negligence, Negligence Per Se, Gross Negligence, Private
Nuisance, and Public Nuisance
In Texas, the statute of limitations period for tort claims involving damage to personal
property is two years. TEX. CIV. PRAC. & REM. CODE § 16.003(a). The limitations period for
nuisance claims is two years as well. Schneider v. Nat. Carriers, Inc. v. Bates, 147 S.W.3d
264, 270 (Tex. 2004) (citing § 16.003). For both causes of action, the statute of limitations
begins to run when the cause of action accrues. § 16.003(a). “In most cases, a cause of action
accrues when a wrongful act causes a legal injury, regardless of when the plaintiff learns of
that injury or if all resulting damages have yet to occur.” Provident Life & Acc. Ins. Co. v.
Knott, 128 S.W.3d 211, 221 (Tex. 2003).
Here, the legal injuries alleged are the diminished values of Plaintiffs‟ homes and
properties, the loss of use and enjoyment of their properties, and mental anguish. (Pls.‟ Prop.
Centex has not provided any statutory or common law authority in support of its contention that Plaintiffs‟
claims are time-barred by a two-year limitations period. Nor have Plaintiffs provided authority demonstrating that
the applicable limitations periods are longer than two years.
Am. Compl. ¶ 25, Doc. No. 18, Attach. 1). All of these injuries were caused by the collapse of
the retaining wall. Accordingly, the limitations period began to run when the wall collapsed on
January 24, 2010. Because Plaintiffs did not file their amended complaint until July 11, 2012,
more than two years after the collapse, all of Plaintiffs‟ negligence and nuisance claims against
Arias and Gravity Walls will be time-barred unless an exception applies to toll the statute of
The Texas Supreme Court has recognized two doctrines that may apply to toll the
statute of limitations. BP Am. Prod. Co. v. Marshall, 342 S.W.3d 59, 65 (Tex. 2011). The first
is the discovery rule, which tolls the running of limitations “until the injury could reasonably
have been discovered.” Id. (emphasis added). The discovery rule only applies if the type of
injury is “inherently undiscoverable,” and the “legal question of whether an injury is
inherently undiscoverable is determined on a categorical basis.” Shell Oil Co. v. Ross, 356
S.W.3d 924, 930 (Tex. 2011). Here, there is no question that the collapse of the massive
retaining wall was immediately discoverable, as was the alleged damage to Plaintiffs‟
properties. Thus, limitations began running immediately when the wall collapsed. It makes no
The applicable filing date here is the date on which Plaintiffs filed their proposed amended complaint adding
Arias and Gravity Walls as defendants. The date Plaintiffs filed their original petition is irrelevant because neither
federal nor Texas law permit Plaintiffs‟ proposed addition of Arias and Gravity Walls to relate back to the
original filing date. “Under federal law, adding a new defendant generally does not relate back to the filing of the
original complaint unless Federal Rule of Civil Procedure 15(c)(3) [now codified as Rule 15(c)(1)(C)] applies.”
Braud v. Transp. Serv. Co. of Ill., 455 F.3d 801, 806 (5th Cir. 2006). Rule 15(c)(1)(C) only applies “to the
changing or substitution of defendants, not to the addition of new defendants without any substitution of the old
ones.” Id. at 806 n.12 (referring to former Rule 15(c)(3), which has been recodified to its present form without
any substantive changes). Likewise, under Texas law, misnomer and misidentification are exceptions to the
general rule that “an amended pleading adding a new party does not relate back to the original pleading.” Univ. of
Tex. Health Sci. Ctr. at San Antonio v. Bailey, 332 S.W.3d 395, 400 (Tex. 2011). Here, Plaintiffs are attempting
to add two new defendants without substituting an original defendant, so Plaintiffs‟ claims against Arias and
Gravity Walls do not relate back to the original complaint.
difference that Plaintiffs might have not discovered who was responsible within the two-year
period; rather, limitations began to run when they discovered the injury.
The second doctrine that can toll limitations under Texas law is fraudulent
concealment. Fraudulent concealment can toll limitations if the defendant “actually knew the
plaintiff was in fact wronged, and concealed that fact to deceive the plaintiff.” BP Am. Prod.
Co., 342 S.W.3d at 67 (citation omitted). Fraudulent concealment tolls the running of
limitations until “the fraud is discovered or could have been discovered with reasonable
diligence.” Id. Like the discovery rule, the focus of the fraudulent concealment doctrine is the
date on which a plaintiff became aware that he had been wronged, not the date on which a
plaintiff became aware of the wrongdoer‟s identity. Plaintiffs were all put on notice that they
had been wronged when the wall collapsed and damaged their properties. Thus, fraudulent
concealment will not toll the accrual of limitations.
Thus, because the Court is aware of no tolling doctrine that applies in this case,
Plaintiffs‟ negligence, gross negligence, negligence per se, private nuisance, and public
nuisance claims against Arias and Gravity Walls will likely be barred by the two-year statute
b. Plaintiffs’ Claims for Alleged Violations of the Texas Deceptive Trade Practices Act
Some Texas appellate courts have also recognized a third tolling doctrine, which they refer to as “equitable
tolling.” “Equitable tolling applies in situations where a claimant actively pursued his judicial remedies but filed a
defective pleading during the statutory period, or where a complainant was induced or tricked by his adversary's
misconduct into allowing filing deadlines to pass.” Bailey v. Gardner, 154 S.W.3d 917, 920 (Tex.App.-Dallas
2005, no pet.). A defective pleading includes a pleading in which the wrong defendant was sued and the proper
defendant was not named until after the limitations period expired. Id. (citation omitted). Plaintiffs in this case do
not allege that they were tricked. Nor do they allege that they filed suit against the wrong defendant. Even if the
Court were to find that equitable tolling could possibly apply to toll limitations while Plaintiffs‟ motions to
intervene and consolidate were pending, Plaintiffs‟ claims would still be time-barred because Plaintiffs filed their
motions to intervene and consolidate on March 26, 2012, several months after the limitations period had run.
A claim under the Deceptive Trade Practices Act (DTPA) is also subject to a two-year
limitations period. KPMG Peat Marwick v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746,
749 (Tex. 1999). By statute, a DTPA claim “must be commenced within two years after the
date on which the false, misleading, or deceptive act or practice occurred or within two years
after the consumer discovered or in the exercise of reasonable diligence should have
discovered the occurrence of the false, misleading, or deceptive act or practice.” TEX. BUS. &
COM. CODE § 17.565. Like with negligence and nuisance, the accrual date depends on the date
a plaintiff became aware of the deceptive act itself rather than the actor‟s identity. Therefore,
because the wall collapse put Plaintiffs on notice that a deceptive act may have occurred, the
statute of limitations began to run on January 24, 2010. The two-year limitations period
therefore expired on January 24, 2012.12
c. Plaintiffs’ Claims for Breach of Contract and Implied Warranty
Plaintiffs do not allege that they entered into a contract with Arias and Gravity Walls,
and therefore they cannot assert a breach-of-contract claim against them. (See Pls.‟ Prop. Am.
Comp. ¶ 21, Doc. No. 18, Attach. 1). However, Plaintiffs do apparently bring a claim for
breach of implied warranty against Arias and Gravity Walls. (Id. ¶ 22). Under Texas law, a
claim for breach of an implied warranty can be construed as either a claim in tort or in
contract. JCW Elecs., Inc. v. Garza, 257 S.W.3d 701, 704 (Tex. 2008). Plaintiffs‟ claims
against Arias and Gravity Walls would fail either way. If contractual in nature, their claims
Moreover, all of Plaintiffs‟ claims against Arias and Gravity Walls under the DTPA rely on alleged
misrepresentations, failures to disclose, and unconscionable performance of a contract. (Pls.‟ Prop. Am. Compl.
¶ 20, Doc. No. 18, Attach. 1). Since Plaintiffs allege that they did not even know about Arias and Gravity Walls,
let alone conduct business with them, before learning of Centex‟s lawsuit, Plaintiffs‟ claims under the DTPA
against Arias and Gravity Walls would likely fail.
would fail because the parties did not enter into a contract together. If tortious, the claims
would fail because the two-year statute of limitations has run, as discussed supra.
d. Plaintiffs’ Claims for Fraud
Plaintiffs allege fraud against Arias and Gravity Walls. (Pls.‟ Prop. Am. Compl. ¶¶ 1819, Doc. No. 18, Attach. 1).13 Under Texas law, the elements of fraud are:
(1) that a material representation was made; (2) the representation was false; (3)
when the representation was made, the speaker knew it was false or made it
recklessly without any knowledge of the truth and as a positive assertion; (4)
the speaker made the representation with the intent that the other party should
act upon it; (5) the party acted in reliance on the representation; and (6) the
party thereby suffered injury.
In re FirstMerit Bank, N.A., 52 S.W.3d 749, 758 (Tex. 2001). Plaintiffs do not allege that
Arias and Gravity Walls ever made a material representation to them. On the contrary,
Plaintiffs allege that they had no knowledge that Arias and Gravity Walls were even involved
with the design and construction of the retaining wall until after Centex filed its lawsuit.
Therefore, Plaintiffs have not alleged facts sufficient to support a fraud claim against Arias
and Gravity Walls.
Thus, after careful consideration of each of Plaintiffs‟ claims against Arias and Gravity
Walls, the Court finds that there is no reasonable basis to predict that Plaintiffs will be able to
recover against them.14 Accordingly, despite the additional expenses Plaintiffs might incur by
pursuing litigation in another forum, the Court finds that Plaintiffs would not be significantly
Plaintiffs do not allege fraud in a real estate transaction against Arias and Gravity Walls; Plaintiffs only allege
fraud in a real estate transaction against Centex. (See Pls.‟ Prop. Am. Compl. ¶¶ 15-17, Doc. No. 18, Attach. 1).
To be sure, the Court does not find that Plaintiffs‟ claims will undoubtedly fail. Rather, the Court finds that
there appears to be a substantial likelihood that the claims will not be successful and, therefore, that Plaintiffs will
not be prejudiced if their motion for leave to file an amended complaint is denied. See Martinez, 701 F. Supp. 2d
at 892 (holding that while the court did not decide the merits of the limitations defense, the existence of a possible
limitations defense mitigated the prejudice that might occur from a denial of joinder). If desired, Plaintiffs may
still pursue their claims against Arias and Gravity Walls in state court.
prejudiced if the Court denies their motion for leave to amend. Accordingly, the third
Hensgens factor weighs against permitting the proposed amended complaint.
4. Other Factors Bearing on the Equities
Neither party points to any other factors bearing on the equities in this case. However,
the Court identifies one additional factor that should be considered here.
In Hensgens, the Fifth Circuit directed courts to balance the danger of parallel
proceedings with the defendant‟s “interest in retaining the federal forum.” Hensgens, 833 F.2d
at 1182. Here, the Court finds that Pulte‟s interest in maintaining the federal forum is
especially strong because litigation has already progressed for over eight months, and Pulte
has had a motion for summary judgment pending for over six months.15 If the case were
remanded, Pulte would be faced with additional delays. The potential for additional delays in
resolving Pulte‟s motion, while certainly not dispositive by itself, is nonetheless one additional
factor that weighs in favor of denying Plaintiffs‟ proposed amendment.
After considering the relevant factors, the Court finds that Pulte‟s interest in
maintaining the federal forum outweighs Plaintiffs‟ interest in not having parallel lawsuits.
Accordingly, Plaintiffs‟ motion for leave to file their first amended complaint (Doc.
No. 18) is DENIED.
SIGNED this 9th day of October, 2012.
UNITED STATES DISTRICT JUDGE
Pulte filed its motion for summary judgment on March 20, 2012. (Doc. No. 4).
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